After Chico river, Makabayan goes after Kaliwa dam at Supreme Court

MANILA, Philippines – The Makabayan bloc is not letting up on the Duterte administration’s China loans, as it filed a new petition before the Supreme Court wanting to declare as illegal and void the loan agreement for the $211 million Kaliwa Dam.

Neri Colmenares, Makabayan’s senatorial bet, led the filing on Thursday, May 9. It was a petition for prohibition that questioned numerous provisions in the loan agreement which they claim are unconstitutional. The petitioners included members of indigenous and environmental groups.

Before this, Colmenares and company went to the Supreme Court to question the Chico River Dam loan agreement. In response, the Supreme Court asked the Duterte administration to answer the petition.

Arguments

Like the Chico River dam, Makabayan questioned the confidentiality clause of the Kaliwa dam.

Under the loan agreement, the borrower – the Philippines – cannot disclose any information without “the prior written consent of the lender,” or China.

Section 21, Article XII of the 1987 Constitution says: “Information on foreign loans obtained or guaranteed by the government shall be made available to the public.” (READ: Kaliwa Dam deal 'as onerous' as Chico River project)

The Constitution and several laws require that any loan agreement get the prior approval of the Monetary Board (MB) before it’s signed.

Makabayan’s petition claims that  “the Loan Agreement taken together reveal that the respondents not only set aside the constitutional requirement of prior MB approval, they also assured China that the same will be forthcoming, thus forcing the hand of the Monetary Board to issue its approval for the onerous loan from China for Kaliwa Dam.” (READ: Made in China: Loan terms with waivers, shrouded in secrecy)

Also similar to the Chico River loan, the Kaliwa Dam loan agreement says that the contractor must be pre-selected by China. 

“A loan agreement to finance a project awarded to a pre-selected Chinese contractor violates the constitutional preference to qualified Filipinos and existing procurement laws,” the petition said.

Waiver of immunity

The Kaliwa Dam loan agreement also has a waiver of immunity where “the Borrower hereby irrevocably waives any immunity on the grounds of sovereignty or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8.5 hereof or with the enforcement of any arbitral award pursuant thereto.”

The waiver of immunity in the Chico River loan agreement raised alarm for supposedly putting at a potential giveaway the country’s patrimonial asset, which Senior Associate Justice Antonio Carpio said is oil in the Reed Bank.

Patrimonial assets were not explicitly mentioned in the Kaliwa Dam loan agreement, but Makabayan said the collaterals “could include patrimonial properties.”

“Since the Chinese Government, being a foreign entity, is not qualified to acquire or hold lands in the Philippines, then the provisions on the collateralization of territorial property therefore runs counter to the Constitution,” Makabayan said. – Rappler.com

Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email lian.buan@rappler.com or tweet @lianbuan.

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